Determining a Salary

[Barkeep49]

I have recently been promoted to a supervisory position and am now facing a bit of a quandary.

One of the people I supervise, who we pay a salary to, will be going on maternity leave. We've made the decision that we will be replacing her temporarily with a part time employee, who we will be paying by the hour, and who will have less responsibilities. I've been tasked with coming up with the hourly rate. Through research I've found out a fair starting salary rate. The problem is that the person we want to hire has several years worth of experience which we should compensate her for, and which we would like to include in our offer since our wage is likely going to be less than what she currently makes at another part time job. Are there rules of thumb about how to factor in this experience?

[Mustang]

Since it is for a short time, I would think that you would want to just have a short term contract with someone or hire a contractor rather than hire someone out right.

Do you really need to worry about factoring experience to compute the salary? (other than worrying about overpaying). But, seems that if you really want this particular person, you'll have to find out what it will take to get her.

[Mizzou B-ball fan]

I'm honestly somewhat surprised that you're concerned about extra experience compensation in a market such as what we have right now. We're hiring veteran IT workers right now for $10,000-20,000 less than their market value because it's an employer's job market. We know that we're offering less than normal market, but the veteran IT worker needs a job and is willing to take the lower salary with benefits. They know that if they say 'No', we've got several people waiting in the wings behind them to snatch that position.

If you feel like this is the only person that can fill your needs and they're pushing on salary, that's fine. Otherwise, move on and pick up a resource that will take the salary you feel you can afford.

[OldGiants]

I have a background in compensation, so here's my take:

If the person has a part time position now, going to a temporary full time that works 40 hours instead of less than that (if the part-time is really less than 40) will arrive at a higher weekly wage. That matters to people.

You also don't want to pay the temporary hire more per week or hour than the woman out on maternity leave or that one will be pissed on upon return. She will learn about it, if you do this.

Essentially, offer what the current employee makes per hour, unadjusted for the lack of benefits. Doing otherwise will create potenetial problems when the maternity leaver returns.

[CU Tiger]

Originally Posted by Mizzou B-ball fan

I'm honestly somewhat surprised that you're concerned about extra experience compensation in a market such as what we have right now. We're hiring veteran IT workers right now for $10,000-20,000 less than their market value because it's an employer's job market. We know that we're offering less than normal market, but the veteran IT worker needs a job and is willing to take the lower salary with benefits. They know that if they say 'No', we've got several people waiting in the wings behind them to snatch that position.

If you feel like this is the only person that can fill your needs and they're pushing on salary, that's fine. Otherwise, move on and pick up a resource that will take the salary you feel you can afford.

That's a great attitude.
Builds no employee loyalty, and those people will remember when the market returns and their first offer comes along.

My compensation philosophy is pay what it takes to retain your best people, hell I pay what it takes to make sure they never go looking....the bottom half, I intentionally under pay, and let it be known what the top half makes..they either improve or move on either way its a win.

That said
- Dont pay more than perm person, in fact dont make it too close for comfort
- From there just have a real conversation. "We like what you can offer, what will it take to make our part of our team. Naturally Id offer a "little" less than that number but it gets you in the range

[Mizzou B-ball fan]

Originally Posted by CU Tiger

That's a great attitude.
Builds no employee loyalty, and those people will remember when the market returns and their first offer comes along.

My compensation philosophy is pay what it takes to retain your best people, hell I pay what it takes to make sure they never go looking....the bottom half, I intentionally under pay, and let it be known what the top half makes..they either improve or move on either way its a win.

It's a long-term contracting position with the government. It's a situation where you sacrifice some money, but you have security (which is in rare supply right now). If the economy improves, the pay improves. We've honestly never had any issues hiring people and the low stress and 40 hour work week helps tremendously. You'd be surprised how many people are willing to take lower wages in exchange for quality of life.

[TroyF]

Originally Posted by Mizzou B-ball fan

It's a long-term contracting position with the government. It's a situation where you sacrifice some money, but you have security (which is in rare supply right now). If the economy improves, the pay improves. We've honestly never had any issues hiring people and the low stress and 40 hour work week helps tremendously. You'd be surprised how many people are willing to take lower wages in exchange for quality of life.

I wouldn't be surprised. I support franchises and the most successful ones usually have the best working enviornment and keep their employees for longer. They've found out they can pay a couple of bucks an hour under the market rate, but make up for it by keeping morale high.

I'm always surprised more business owners don't understand this.

[Mizzou B-ball fan]

Originally Posted by TroyF

I wouldn't be surprised. I support franchises and the most successful ones usually have the best working enviornment and keep their employees for longer. They've found out they can pay a couple of bucks an hour under the market rate, but make up for it by keeping morale high.

I'm always surprised more business owners don't understand this.

That's exactly the way this is set up. We don't make as much, but they literally kick us out after 40 hours because the contract says they have to pay 1.5x after that point. Great benefits with about 15% under what the private sector pays, but the private sector doesn't kick you out after 40 hours of work.

[DanGarion]

Originally Posted by Mizzou B-ball fan

We're hiring veteran IT workers right now for $10,000-20,000 less than their market value because it's an employer's job market.

I'm not sure what it is about here in SoCal, but we have been having a hell of a time finding new technicans. A number of the people interviewed failed their background check due to lies on their application, etc. We were supposed to have a class of 10 technicians, and only ended up with 6 (with two of those being internal transfers).

[Rizon]

Figure out a fair salary and multiply it by 64%. It's the American way.